What does it take to get angel investors for your company?
Petri Lehmuskoski is an angel investor who started six businesses, three of which became multi-million companies.
His companies have been listed among the fastest growing Finnish companies multiple times. Since his exit in 2010, Petri became a full time angel investor.
Petri takes an active role with his investments with a focus on building product/market fit and go-to-market tactics and strategies. He has managed and been responsible for market entries of brands such as Commodore, Logitech, Electronic Arts, Microsoft, Activision, Apple, Take 2 and more.
Petri believes that success is achieved. It cannot be granted to someone. He is not afraid to get get his hands dirty when it comes to working with the companies he invests in.
In the following interview Petri shares some of his insights into angel investing.
Success Harbor: Who is Petri Lehmuskoski, what is your background?
Petri Lehmuskoski: My story is typical to angel investor to large extent. I have been an entrepreneur for 30 years with my own companies. I have founded six companies, from which three have become multi-million businesses. In 2010 I turned into full-time angel investor – which differs from most angels.
Success Harbor: You have grown and taken companies from 0 to 120 million Euros. What helped you reach such level of success and why do you think that most businesses are never able to transition into a multi-million size business?
Petri Lehmuskoski: Building a company is neither easy nor fast. It takes time, failures and hard work to build a company. The success does not come – it is “made” – and you need all the help available to get there.
Most startup entrepreneurs want to succeed fast and big – that derails many good startups and end in tears.
Success Harbor: In your blog you wrote that you “have analyzed 1.000+ startup teams, worked with 100+ startup projects and invested in 30+ companies.” What excites you about a startup?
Petri Lehmuskoski: I get exited with great team with execution capability and right entrepreneurial culture – which is hardest to evaluate.
Success Harbor: What do you look for in a startup as you evaluate it for a potential investment?
Petri Lehmuskoski: We look at startups in three “dimensions”. First and easiest being the idea, second being the market and business potential and the hardest and longest being the team.
Success Harbor: What should startups focus on in order to attract investors?
Petri Lehmuskoski: Raising capital is serious and hard work. Each meeting with investors should be utilized as a learning process for improving the company and materials. I look especially on the facts that entrepreneurs show that they understand what they are aiming at. For example CAC’s, CLV’s, go-to-market strategies etc.
Success Harbor: What do investors want to see in a startup to make it an attractive investment?
Petri Lehmuskoski: Understanding of the basic related business drivers (CAC, CLV, conversion levels, retentation levels etc.)
Success Harbor: What should an investor pitch include?
Petri Lehmuskoski: There are several investor pitches – the teaser to get attention, solid facts pitch to convince and team pitch to build trust.
Success Harbor: What role(s) should an angel investor take in the startup?
Petri Lehmuskoski: Startup entrepreneurs have to understand and learn what added value the investor can bring. Many times it is only money, sometimes contacts and rarely actual insights (hopefully).
Success Harbor: What mistakes startups make seeking investment?
Petri Lehmuskoski: Mistakes are just opinions related to specific situation handling. In my opinions for example excessive financing is a mistake. Another is underestimating the importance for pitch practice. Arrogance and underestimation of investors intelligence are also surprisingly common mistakes.
Success Harbor: What are unrealistic expectations of startups toward angel investors?
Petri Lehmuskoski: The added value in form of knowledge is typically overestimated. Angel investors are typically working somewhere else (typically their own company) and so their capability of helping is limited. Try to get at least one full time angel investor to invest or in the advisors – they can add value most when the startup entrepreneur needs it.
Success Harbor: How can people find out more about Gorilla Ventures or get in contact with you?
Petri Lehmuskoski: Best is to call our references (for example in linkedin) or just to hit us with email or call.